High earners don't want tax cuts - Ardern

Jacinda Ardern says high-income earners who stand to benefit the most from National's tax cuts have told her they don't want it.

National's biggest election promise so far, revealed in May's Budget, is to slash taxes - especially for high income earners - and slightly boost the Family Tax Credit. It says 2.2 million Kiwis will benefit from the changes, which kick in April 2018.

National's tax cuts, simplified.
Photo credit: Newshub

Labour's promised to cancel the tax cuts, instead offering targeted rebates to beneficiaries, superannuitants, people with babies and those on or close to Working for Families thresholds. The scheme costs far less than National's, but has been criticised by Finance Minister Steven Joyce as a "convoluted spaghetti of entitlements that will confuse everyone".

Speaking to The AM Show on Friday, Ms Ardern said Labour's package will see 70 percent of families better off than they would be under National, despite the lower price tag.

"I'm really proud of the fact we've targeted families in that way, and that they will be better off relative to National under us because we have prioritised them.

"The 10 percent of New Zealanders in the top tax bracket, the top 10 percent of earners where National are spending $400 million on giving them a tax cut, those people I have heard say to me 'now is not the time for us - focus on others'. So that's what we have done."

National MP Judith Collins, also appearing on The AM Show, said Labour's scheme is "not fair" because it takes "$2 billion off hardworking Kiwis". She said many police officers' incomes touch the top tax bracket, and they don't have "any opportunity to add to their income".

Ms Ardern said that wasn't true, because extensions to Working for Families entitlements meant police officers "are the kinds of people that would benefit from our package".

She called it "more generous than a tax cut".

Child Poverty Action Group economic spokesperson Susan St John earlier this week said there elements of truth in both Labour and National's claims - acknowledging that while Labour's package is more generous to low-income families, but its increasing complexity could result in people not receiving what they were entitled to.

Ms St John also said Labour missed a few opportunities, saying the party should have reduced abatement rates and scrapping the in-work tax credit.

"[It is] an absurdly complicated tax credit supposedly for children but based on parental hours of work. It will have to be dealt with eventually, but Labour has parked it," she told RNZ.